The first action of the New reform was to calm and pacify the people. Those who had participated in the counter-revolutionary uprising were released, and the cases of those accused of hiding their property were concealed. the people whose death sentences had not yet been implemented were instead given ten years imprisonment or were pardoned.
The Uniting of Lenin and Buddha
The new policy called strict observation of the provision of the Consitution of the MPR, which said that religious beliefs should be conducted on a voluntary basis. The forcing of lamas to become layman was stopped; ex-lamas were allowed to retake their holy orders if they wished. In just one year, more than 27,000 people became lamas.
According to the new 1932 Tax Law, objects of religious worship were tax-exempt, and only livestock could be taxed. Although the costs of caring for livestock came strictly from the Jasa (monastic households), ards were allowed to take care of the animals. During the time of the New Reform Policy one monastery, three temples and twenty-seven jasas were built.
A campaign was organized to attract back numerous ards who had fled southward as the result of the leftist upheaval in 1928-1932. More than two thousand ard families were brought back to Hovd aimag alone, following 195 families in the Altai region. Not only were the refugees promised indemnity from prosecution, but upon their return, they were given herds, property, good pastures, credits and were exempt from taxes for one year. But none knew that a terrible menace was awaiting them ahead, for which the people who invited them back were not responsible.
The Merging of Socialism and Capitalism
Mongolian herdsmen, whose livestock had been confiscated and a third of which was completely lost, were given support in 1932. This was the only time before 1990 that livestock breeders were treated with such enormous economic liberty. First of all the collectives, the destructive force which the herdsmen of Mongolia feared most, were disbanded. None of the more than eight hundred collective communities remained by the end of 1932, when Prime Minister Genden openly declared, “the collective community is unacceptable in the Mongolian context, and secondly, it is incompatible with the [culture of] the ards themselves”.
The new tax law considerably alleviated the burden of livestock breeders, while the herdsmen’s tax wax reduced t one third, reaching only 1,800,000 togrogs in 1933, as opposed to 4,300,000 in 1931.
Livestock breeders were provided with state loans. Preferential loans worth 419,000 togrogs were given to livestock breeders in the second half of 1932 and 1,200,000 togrogs in loans were given in 1934.
The engiin hudaldaa (ordinary trade), an interesting form of free trade, was supported during the years of the New Reform Policy: raw materials from animal and wholesale goods were bought from ordinary traders at a discount of 9 to 12 percent and resold to the state at a 10 to 25 percent markup. This was a kind of middle ground between socialism and capitalism. As their state tax was reduced, people became interested in developing this kind of business.
By 1932, 28 people had obtained licenses for ordinary trade and by 1934 that number reached 1,200 which shows the extent to which business was flourishing. Within two years livestock breeders had raised 3,400,000 head of animals, while in the leftist years the cattle population had decreased by 7,500,000 head.
Later, the communist regime would blame everything progressive in the society on Genden, credited the favorable statistic to the wise leadership of the MPRP.
The foundation for industry was laid in Mongolia as well in the process of industrialization and mechanization which swept through the Soviet Union. The first Mongolian production enterprises were set up in 1932 in several places, including Ulaanbaatar. The Ulaanbaatar power station, the Hatgal wool refinery, and an industrial combine were put into service in 1934. Soviet power generators were transported from Ulaan-Ude, providing the Mongols with electricity. But having lived as nomads for centuries, the people were far from ready to settle in one place and lead a proletarian lifestyle. Evidence for this is found in the fact that among the 600 people employed at the industrial combine, only 285 were Mongolians, while there were 115 Chinese and 215 Russians.
Power Changes in the Party Leadership
As neither the USSR nor the Comintern could be blamed for anything, Mongolia had to bear the blame for the civil war. Ex-party secretaries Shijee and Badrah were officially held responsible for the unrest, and were labeled as the “leaders of leftist opportunism”. Prime Minister Jigiidjav, who was considered the principal leftist personality, was dismissed from all his posts.
Interestingly, gender, Secretary of the Central Committee of the MPRP, who initiated and was in charge of the leftist movement in Mongolia, was left unblamed; moreover he was entrusted to carry out the New Reform Poilcy and promoted to the post of Prime Minister.He considered Mongolia one of the republics of the USSR. Evidently, this policy was not to the liking of Denden and Demid, who were both of Central Halh nationality.
This proud oil on the flame of disagreement existing between the leaders of the Mongolian leftists, who had been victorious at the Seventh Party Congress. Although slight differences between the leftists and rightists had existed since 1928, these became more serious with full-blown disagreements on such problems as the confiscation of property and collectivization.
It is impossible not to mention the Comintern, which directly guided the hysteria of the leftist extremes. The Comintern’s secret resolution “On Mongolia” pointed out that its administration of the People’s Revolutionary Government of Outer Mongolia had failed to outline and distinguish political and party activities, and had created enormous difficulties for the government of Outer Mongolia. The decision was made to cancel the Comintern’s authority over the People’s Government of Mongolia and withdraw its resident representative. Thus the Comintern representation in Mongolia came to an end and the Kremlin decided to take everything into its own hands. Now they could do what they wished with Mongolia, this country isolated from the rest of the world.
- 1933, February: Radio broadcasting began in Ulaanbaatar. The death of the 13rd Dalai Lama, Thubten Gyamtsho. Soviet Mongolian Joint Whole Sale Center was established. A Wool Washing Factory in Hatgal began operation.
- 1934: National Commerce Center established.
- July: State Trade Center established.
- September: The 9th Congress held.
- October: Natsagdorj’s [play, the Three Hills was performed for the first time on stage.
- 1935, January: A railway line between Ulaanbaatar and Nalaih was built. The birth of the 14th Dalai Lama, Tenzin Gyamtsho.